Time Warner Forecasts Loss

NEW YORK, January 7: Time
Warner has revised its profit expectations for 2008, forecasting a loss as the
result of a projected $25 billion write-down.

Time Warner has revised
downward the growth rate in its expected adjusted operating income before
depreciation and amortization. The growth rate has been lowered for several
reasons, including the slowdown in the ad business, particularly at AOL and in
the publishing division. Moreover, there is the $25 billion impairment charge,
which includes a $15 billion charge on cable franchise rights in the fourth
quarter at Time Warner Cable. The cable platform also anticipates a $350
million charge on its investment in wireless broadband provider Clearwire
Corporation. Time Warner also cited a trial judgment against Turner
Broadcasting System over the sale of its winter sports teams in 2004, resulting
in a $280 million charge. Plus, the restructuring of a lease held by a now
bankrupt entity in the Time & Life Building will lead to a $50 million to
$60 million charge. And $40 million has been added to reserves for potential
credit losses related to bankrupt Time Warner customers.

With these added
considerations, Time Warner projects a net loss for 2008, as compared with a
previous forecast of an earnings per diluted share from continuing operations
of $1.04 to $1.07.

The company is due to
present its fourth-quarter and full-year results on February 4.

—By Mansha Daswani